If you're looking to buy a home, 2019 might be a good year for you. Home prices will continue to increase, but at a much slower rate than 2018. The other good news is that the homes that are for sale are receiving fewer offers, so the chances that you'll be in a bidding war with other buyers is dropping.
The bad news, though, is that mortgage rates are going to continue to rise. This, of course, will impact how much house you can afford, as the higher your interest rate, the more your payment is.
The key to finding the house you want, at a price you can afford, is planning, preparation, and patience.
Keep reading for a home buying checklist that will get you on the right track to the home of your dreams.
If you need to sell your current home to buy a new one, you need to be intentional about your timeline.
The bank may not allow you to carry two mortgages or you may need the funds from selling your first home to use as a down payment for the new one, so you'll need to time it appropriately. This guide can help.
Getting your finances in line should be the first thing you do when you want to buy a house. In fact, you need to start thinking about this months before you actually plan to apply for a mortgage.
Determine how much you have for a down payment and how much you can afford for a payment each month. Don't forget to factor in property taxes and insurance.
Those can increase your monthly payment by a few hundred dollars or more, depending on the property taxes and price of insurance in your area.
Set aside your down payment amount, clean up your credit report, and don't alter your finances in the months before you apply for a mortgage. Lenders want to see stable finances and limited new accounts on your credit report.
Now that your finances are in order, it's time to apply for a mortgage. Shop around to see who is going to give you the best rates. Shopping for a mortgage lender and rate won't hurt your credit.
When shopping for a mortgage, student loan, or auto loan, the credit reporting agencies will typically consider multiple inquiries in a short period of time as just one inquiry so you aren't punished for shopping around for the best rates.
Once you settle on a lender, you should get a pre-approval letter. Don't get a pre-qualification letter. That isn't as strong as a pre-approval.
A pre-approval lender indicates that they have reviewed your credit and states that their preliminary review indicates that you are eligible for a mortgage and the amount they will lend you. Most home sellers will ask for your pre-approval letter before they consider your offer.
Find a real estate agent that you like. You'll be spending a lot of time with them. Ask friends and family for referrals, or use someone you know and have worked with in the past. You'll want someone responsive, timely, and who understands what you want.
Somewhere along the line, you need to decide what you want in a home. Make a list of must-haves, such as location, number of bedrooms, garage, basement, etc. Whatever your non-negotiables are.
Then make a list of nice-to-haves. These are things that aren't a must but would be nice to have, such as an updated kitchen, pool, or bonus room.
If you're buying with a partner, make sure you're both on the same page before you start visiting homes.
Visit as many homes as it takes to find what you want. A house is a significant financial decision, so you don't want to rush into it. Whether that means you see 10 homes or 100 homes, do what it takes to find what you want.
Once you decide on a home, make an offer. This is where a real estate agent is really going to come in handy because he or she will write up the offer and communicate with the seller or their realtor.
Your real estate agent will also help you determine what is a fair and competitive offer and walk you through any negotiations with the sellers.
Getting a home inspection will bring to light any issues with the home that aren't visible to someone who isn't a professional.
Water damage, foundation issues, roof damage, or aging appliances will all be noted by an inspector. An inspection allows you to go into the purchase process with a full picture of what you're getting.
You should be in contact with your real estate agent and mortgage lender through this entire process. They'll need various things from you as they prepare the loan and the closing documents.
The lender will also be the one to give the final approval for the closing, so it's important to make sure you give them everything they need in a timely manner.
Before the closing, you'll want to do a walk-through of the home with your real estate agent. You can make sure the home is in the condition you expect and check to see if any repairs that the seller agreed to make are completed.
Once the closing happens and the paperwork is signed, the house is yours, so make sure you're getting what you think you are before signing.
Finally, once the mortgage underwriter gives the final approval, it's time for the closing. Prepare to sign your name A LOT during the closing.
Depending on what your contract stipulates, you'll get the keys to your new home at the closing (in other situations, you and the seller may agree on a date in the future where you take possession of the home).
The home buying process can be overwhelming. It's long and requires a lot of patience on your end, as there are many things that you have to rely on others to do. This home buying checklist can help you stay on track.
This process can seem even more stressful if you're trying to sell your existing home at the same time. Why not make the selling process easy on yourself by hiring a professional who can help you sell your existing home quickly and for top dollar?
Contact us today for a free 15-minute consultation on selling your home.